The South African Reserve Bank is keeping its key lending rate at current four-decade lows. Governor Gill Marcus announced this afternoon that interest rates will stay on hold at 5%.

The repo rate was last cut in July 2012. This was the final policy meeting for the year by the monetary policy committee.

Last month Finance Minister Pravin Gordhan tabled his mini budget which was loaded with cost cutting measures. He also revised growth prospects downwards to 2.1% of the gross domestic product this year.

Marcus said the growth outlook remains fragile and the bank has revised 2013 GDP growth down to 1.9%. GDP growth is nevertheless expected to recover to 3.0% next year and 3.5% in 2016, said Gordhan at the time.